Hewlett-Packard, aka HP, one of the largest technology manufacturers today, had announced its plans to take over Autonomy Corporation, an enterprise software company in August this year. The proposal was finalised with a deal of $10.3 billion this October following some rumours of big companies like Oracle and Microsoft bidding on the same company last year. Though investors consider this as a very costly affair, with this whooping deal, each shareholder of Autonomy Corp. will receive $ 42.11 per share delighting its co-founders Mike Lynch and Richard Gaunt. Autonomy Corporation, a British software company borne out of Cambridge University’s research, is the leader in the enterprise management releasing unstructured data from emails, phone calls, Facebook and Twitter tweets etc which traditional databases do not contain.
HP’s CEO Meg Whitman said at an event that HP is also considering a possible separate unit for its PC business, eyeing heavily on a spin-off worth around. She stated that the company now requires focusing and working more on its software business making the PC hardware business a separate unit. HP is now moving on to concentrate more on the software and its services. The company, she said though has not yet decided on any pay/job cuts so far, relief for the employees.
HP has already abandoned the mobile maker and the smart phone manufacturer Palm Inc. and its operating system webOS based hardware products, especially its entire computer range as it had been the cause of a very disappointing sales making it even tougher for the then CEO Leo Apotheker (ousted last month from HP). The operating system webOS was running on many HP products like TouchPad tablet and a range of other Smart Phones. It is now moving on to improve its software business with this one big step of buying Autonomy Corporation.
Though there was a rush in all the announcements made by HP about this deal, it only helped HP in the end mounting its stocks to a new high in a very limited amount of time. Meg Whitman went on to address the conference hosted by the Public Policy Institute of California, that the Autonomy acquisition was part of the proceedings earlier made by the then CEO Leo Apotheker. It clearly wants to improve the profits but it all depends on the business approach it is going to follow, analysts predict. The stocks have hit an all time high, with HP buying around 87% of Autonomy shares. The remaining shares are kept open as well. Autonomy will continue to work under Mr. Mike Lynch (Co-founder of Autonomy Corp.) as a separate division of HP.
In the near future, HP will not consider any more large acquisitions and as the CEO suggests, this might be the end of such large takeovers. Till then, we only expect Whitman has a better stay unlike her predecessor, at her newly acquired position as the chief of HP and let us hope Autonomy was the right fit filling the gap to reinvent HP’s software strategy.
